]]>An Attorney General Opinion (KP-0250) released on May 22 provides that a court would likely find that the deadline provisions in the Texas Insurance Code applicable to Health Maintenance Organizations (“HMOs”) and Preferred Provider Organizations (“PPOs”) relating to prompt payment apply to out-of-network emergency care providers, while the penalty provisions contained do not apply to these claims. The deadlines provided in sections 843.338 and 1301.103 provide timeliness requirements for when an HMO or PPO must pay on an eligible clean claim submitted by a provider. In the case of non-electronic claims, they must be paid “not later than the 45th day” following receipt of the clean claim by the HMO or PPO. In the case of electronic claims, they must be paid within 30 days. Where an HMO or PPO fails to pay an eligible clean claim within the deadline, they must pay “the contracted rate owed on the claim plus a penalty.” See §§843.342(a), 1301.137(a). However, where there is an out-of-network claim, a contracted rate doesn’t exist and prevents the calculation of the penalty contemplated under the statute. As such, the Attorney General provides that “a court would likely conclude that the penalty provisions in sections 843.342 and 1301.137 cannot apply to claims filed by out-of-network emergency care providers pursuant to sections 843.351 or 1301.069.”

The Attorney General agreed with the Department of Insurance view that the “plain language of the statute precludes [Department] rulemaking that would apply the penalties of Sections 1301.137 and 843.342 to out-of-network providers.” The opinion provides that while the Legislature has provided for where penalties are appropriate, a Court may determine that compelling a claim payment as required by the statute is not a penalty. Attorney General Paxton concludes by stating that:

Depending on the circumstances, a court could conclude that a particular enforcement action to compel the claim payment required by statute is not in the nature of a penalty and is within the Department’s authority to implement.

]]>https://www.thehealthlawpulse.com/2019/05/texas-attorney-general-addresses-prompt-pay-requirements-for-out-of-network-emergency-services/The Supreme Court resolves circuit split on FCA statute of limitations periodhttp://feeds.lexblog.com/~r/TheHealthLawPulse/~3/3xyET3SBcSs/
Tue, 14 May 2019 20:36:28 +0000https://www.thehealthlawpulse.com/?p=4370On May 13, the U.S. Supreme Court unanimously affirmed a decision by the U.S. Court of Appeals for the 11th Circuit, holding that the False Claims Act’s (“FCA”) limitations period in 31 U.S.C.(b)(2) applies to “relator-initiated actions” in which the Government declines to intervene and that a relator in a nonintervened suit is not “the...… Continue reading

]]>On May 13, the U.S. Supreme Court unanimously affirmed a decision by the U.S. Court of Appeals for the 11th Circuit, holding that the False Claims Act’s (“FCA”) limitations period in 31 U.S.C.(b)(2) applies to “relator-initiated actions” in which the Government declines to intervene and that a relator in a nonintervened suit is not “the official of the United States” whose knowledge triggers Section 3731(b)(2)’s limitations period. Cochise Consultancy Inc. v. United States, ex rel. Hunt, No. 18-315 (May 13, 2019) (“Cochise”).

The FCA contains two applicable limitations periods for actions alleging that a person presented false claims for payment to the Government. Under the statute, an action cannot be brought (1) more than six years after the violation was committed, or (2) more than three years after “the official of the United States charged with responsibility to act in the circumstances” knew or should have known the relevant facts, but in no event more than 10 years after the violation was committed—whichever period occurs last. 31 U.S.C. § 3731(b)(1) & (2).

The relator in Cochise, Billy Joe Hunt, acknowledged that his suit fell outside Section 3731(b)(1)’s six-year limitations period, but argued that his complaint was timely under 31 U.S.C.(b)(2) because his suit was filed within three years of his interview with federal agents about the defendant’s alleged fraud and within 10 years after the violation occurred. The defendant, Cochise Consultancy, argued that Hunt’s qui tam action was barred by the six-year statute of limitations under 31 U.S.C. § 3731(b)(1). Alternatively, Cochise argued that a relator in a declined FCA suit should be considered “the official of the United States charged with responsibility to act in the circumstances.” The district court agreed with defendants and dismissed Hunt’s suit as untimely. The 11th Circuit reversed, holding that Section 3731(b)(2)’s three-year statute of limitations period: (1) does apply to relators in a qui tam action in which the government declines to intervene; and (2) does not begin until the government learns of the alleged fraud without regard to when the relator may have learned about the fraud.

Before the Supreme Court’s decision in Cochise, federal courts had been divided over whether the three-year equitable tolling provision applies in qui tam cases where the government did not intervene. Courts were also split over whether the tolling provision in relator-initiated cases was triggered by the relator’s knowledge or a Government official’s knowledge.

The Supreme Court’s decision settles both circuit splits, citing the plain text of the statute. First, Justice Thomas, writing for a unanimous court, rejected the defendant’s argument that the Hunt’s qui tam action was barred by the six-year statute of limitations, holding that Section 3731(b)(2)’s limitations period applies equally to cases initiated by relators or the Government. Second, the Court held that the relator in a nonintervened case is not “the official of the United States” whose knowledge triggers the 3-year limitations period.

The Court’s holding is significant because, in certain circumstances, it exposes potential FCA defendants to a longer limitations period for relator-initiated cases. The case also provides defendants with an added incentive to disclose potential FCA violations to responsible Government officials. In addition to bolstering a defendant’s substantive defenses in an FCA action, such disclosures can also potentially shorten the applicable statute of limitations for nonintervened cases.

]]>https://www.thehealthlawpulse.com/2019/05/the-supreme-court-resolves-circuit-split-on-fca-statute-of-limitations-period/DOJ issues guidance on cooperation credit in FCA investigationshttp://feeds.lexblog.com/~r/TheHealthLawPulse/~3/VPJU9GHSrNg/
Thu, 09 May 2019 21:40:34 +0000https://www.thehealthlawpulse.com/?p=4368On May 7, the Department of Justice (“DOJ”) released an update to its previous 2017 guidance (“Updated Guidance”) outlining when the government will award cooperation credit to defendants in False Claims Act (“FCA”) investigations. Under the Updated Guidance, set forth at Justice Manual Section 4-4.112, defendants can earn cooperation credit in FCA cases in three...… Continue reading

]]>On May 7, the Department of Justice (“DOJ”) released an update to its previous 2017 guidance (“Updated Guidance”) outlining when the government will award cooperation credit to defendants in False Claims Act (“FCA”) investigations. Under the Updated Guidance, set forth at Justice Manual Section 4-4.112, defendants can earn cooperation credit in FCA cases in three primary ways.

First, cooperation credit may be earned by voluntarily disclosing misconduct unknown to the government. The Updated Guidance intends to incentivize companies and individuals to make proactive, timely, and voluntary self-disclosure about unknown false claims and fraud. Importantly, even if the DOJ has already started an investigation, a company may receive credit for voluntarily disclosing other misconduct outside the scope of the existing investigation.

Second, a defendant can earn cooperation credit by cooperating with an ongoing government investigation. The guidance includes a list of measures that illustrate the types of cooperation activities which will be taken into account. For instance, a company may earn credit for (i) identifying individuals substantially involved in or responsible for the misconduct, (ii) disclosing facts relevant to the government’s investigation gathered during the entity’s independent investigation, and (iii) providing facts relevant to potential misconduct by third-party entities and third-party individuals. However, a company will not earn cooperation credit for carrying out its legal duty to respond to the government’s subpoenas or requests for information.

Third, the DOJ will also consider whether to award cooperation credit based on whether the company has taken appropriate remedial actions in response to an FCA violation. Such remedial action may include (i) implementing a compliance program designed to ensure the conduct does not reoccur and (ii) disciplining or replacing individuals identified by the entity as responsible for the misconduct.

Under the Updated Guidance, the DOJ noted it would usually exercise its discretion to award cooperation credit by “reducing the penalties or damages multiple sought by the department.” However, the Updated Guidance clarifies that the “maximum credit” a defendant can earn “may not exceed an amount that would result in the government receiving less than full compensation for the losses caused by the defendant’s misconduct (including the government’s damages, lost interest, costs of investigation, and relator share).” The DOJ also noted that cooperation credit could take other forms, such as a public acknowledgement of the company’s assistance or an acknowledgement of assistance to an agency for consideration in potential administrative action.

Although it is not clear how the DOJ will implement this Updated Guidance in practice, it offers important guidance that FCA targets should consider after uncovering fraud or false claims or during FCA investigations.

]]>https://www.thehealthlawpulse.com/2019/05/doj-issues-guidance-on-cooperation-credit-in-fca-investigations/CMS publishes draft “Guidance for Hospital Co-location with Other Hospitals or Healthcare Facilities”http://feeds.lexblog.com/~r/TheHealthLawPulse/~3/bK9uMIY31qM/
Mon, 06 May 2019 21:55:35 +0000https://www.thehealthlawpulse.com/?p=4366On May 3, the Centers for Medicare & Medicaid Services (CMS) published its long-awaited draft “Guidance for Hospital Co-location with Other Hospitals or Healthcare Facilities.” The draft guidance is specific to compliance with the general Conditions of Participation for hospitals (CoPs) and does not address the specific location and separateness requirements that apply to other...… Continue reading

]]>On May 3, the Centers for Medicare & Medicaid Services (CMS) published its long-awaited draft “Guidance for Hospital Co-location with Other Hospitals or Healthcare Facilities.” The draft guidance is specific to compliance with the general Conditions of Participation for hospitals (CoPs) and does not address the specific location and separateness requirements that apply to other Medicare-participating entities such as psychiatric hospitals, ambulatory surgery centers, rural health clinics, and independent diagnostic testing facilities. The draft guidance notes that “prior sub-regulatory interpretations prohibited co-location of hospitals with other healthcare entities. This guidance changes that [prior sub-regulatory guidance] to ensure safety and accountability without being overly prescriptive.”

The draft guidance clarifies that under the CoPs, a Medicare-participating hospital cannot properly share with another entity clinical space where patients receive care. “Co-mingling of patients in a clinical area such as a nursing unit, from two co-located entities, could pose a risk to the safety of a patient as the entities would have two different infection control plans. Additionally, the shared clinical space could jeopardize the patient’s right to personal privacy and confidentiality of their [sic] medical records.” The draft guidance further describes: “In general, a hospital should not share space where patients are receiving care. This would include, but is not limited to, any space within nursing units (including hallways, nursing stations, and exam and procedure rooms located within nursing units), outpatient clinics, emergency departments, operating rooms, post-anesthesia care units, etc.”

A hospital and a co-located entity can properly share public spaces and public paths of travel used by both the hospital and the co-located entity. “Examples of public spaces and paths of travel would include public lobbies, waiting rooms and reception areas (with separate “check-in” areas and clear signage), public restrooms, staff lounges, elevators and main corridors through non-clinical areas, and main entrances to a building.” Note that while a hospital and a co-located entity may share a waiting room and reception area, the hospital and the co-located entity must have separate check-in areas and clear signage. The draft guidance further explains: “[T]he sharing of spaces used for medical records and patient registration/admission could also potentially pose a risk to patient privacy as an unauthorized person could have access to patient records without consent.” Both entities would be individually responsible for compliance with the CoPs in the public spaces and public paths of travel.

An individual cannot properly access a co-located entity by utilizing a path of travel through clinical care spaces of the co-located hospital. The draft guidance provides the following example of a public path of travel: “A public path of travel is, for example, a main hospital corridor with distinct entrances to departments (such as outpatient medical clinics, laboratory, pharmacy, radiology). It is necessary [for the co-located entities] to identify, for the public, which healthcare entity is performing the services in which department.” The draft guidance also describes what “would not be public paths of travel: A hallway, corridor, or path of travel through an inpatient nursing unit; or [a] hallway, corridor, or path of travel through a clinical hospital department (e.g., outpatient medical clinic, laboratory, pharmacy, imaging services, operating room, post anesthesia care unit, emergency department, etc.).”

The draft guidance also addresses contracted services and compliance with the CoPs. The draft guidance clarifies that “[w]hen staff are obtained under arrangement from another entity, they must be assigned to work solely for one hospital during a specific shift and cannot “float” between the two hospitals during the same shift, work at one hospital while concurrently being “on-call” at another, and may not be providing services simultaneously. . . . This would also apply to the lab, pharmacy, and nursing director.” “Medical staff may be shared, or “float,” between the co-located hospitals if they are privileged and credentialed at each hospital.”

The draft guidance is available here. Public comments must be received by CMS by July 2. CMS will finalize the hospital co-location policy following the close of the 60-day comment period.

]]>On Tuesday, April 23, the Centers for Medicare & Medicaid Services (CMS) published its Fiscal Year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System Proposed Rule and Request for Information. The proposed rule is available here. A CMS Fact Sheet describing the final rule is available here.

The proposed rule would increase Medicare IPPS payment rates by a net 3.2 percent in FY 2020, compared to FY 2019, for hospitals that are meaningful users of electronic health records and submit quality measure data. CMS estimates that under the proposed rule it would distribute in 2020 about $8.50 billion in Medicare disproportionate share hospital (DSH) payments, an increase of about $216 million from FY 2019. CMS also proposes using a single year of data on uncompensated care costs from Worksheet S-10 of the Medicare cost report for FY 2015 to distribute Medicare DSH payments (rather than averaging three years of data). In addition, CMS is seeking public comments on whether the agency should, due to changes in the reporting instructions that became effective for FY 2017, use a single year of Worksheet S-10 data from the FY 2017 cost reports, instead of the FY 2015 Worksheet S-10 data, to distribute the amount available for uncompensated care payments for FY 2020. The proposed rule would increase the wage index for hospitals with a wage index value below the 25th percentile and decrease the wage index for hospitals with values above the 75th percentile. The proposed rule would increase the marginal rate of the new technology add-on payment, including for CAR T cell therapy, from 50 to 65 percent. CMS also proposes certain updates to its quality incentive programs.

For LTCHs, payments would increase by $37 million as compared to FY 2019. For 2020 and thereafter, CMS proposes a payment reduction for LTCHs that have fewer than 50 percent of cases qualifying for the traditional rate. These LTCHs would be paid a site-neutral rate based on IPPS payments.

The proposed rule will be published in the May 3 Federal Register. The deadline for submitting comments on the proposed rule is June 24, 2019.